Navigating the end of a relationship can be stressful and complicated, especially when dividing assets and liabilities. Many people finalise a property settlement well before finalising a divorce. At Daykin Family Law, we regularly help clients manage their financial and property settlements promptly after separation. Here’s a straightforward guide on handling property settlements before divorce in Australia.

Can You Do a Property Settlement Before Divorce?

As touched on above, yes, you can. Property settlement and divorce are separate legal matters under Australian law. You can finalise your property arrangements right after separation—even the following day in theory, although most people would likely need time to process the separation, work through any preliminary settlement steps and reach agreement. Early settlement simplifies your divorce proceedings, saving time, money, and reducing stress.

Remember, while you can start property settlement immediately, Australian law requires you to be separated for 12 months before formally applying for divorce.

Selling Property Before a Divorce Settlement in Australia

Selling property before a divorce settlement is legal but requires careful planning.

When Selling Property Early Makes Sense:

  • Both parties agree clearly on the sale and the distribution of proceeds.
  • The property needs immediate sale to avoid financial hardship or a decrease in value.
  • Ongoing joint financial obligations, such as mortgage repayments, need to be reduced or ended.
  • Maintenance costs or financial commitments make continued ownership impractical.

Risks of Selling Property Early:

  • Potential disputes over dividing proceeds.
  • Emotional tensions causing communication breakdowns during negotiations.
  • Unexpected tax and financial implications.
  • Possible delays or challenges if one party opposes the sale.

Getting legal advice early ensures fair and enforceable agreements are in place before proceeding.

How to Calculate Property Settlement in Divorce

Australian family law as at the time of publishing this blog (noting there are changes coming to property settlement law on 10 June 2025 which this article does not cover) does not use a fixed formula to calculate property settlements. Instead, the courts consider several factors to determine a fair division:

Step 1: Identify and Value Property

Identify all assets, liabilities, super, financial resources, whether owned jointly or individually. Typically, these include:

  • Real estate (family home and other properties)
  • Bank accounts and cash
  • Investments and shares
  • Superannuation
  • Vehicles and recreational assets
  • Businesses and trusts
  • Jewellery, collectibles, and art
  • Insurance policies
  • Inheritances

Liabilities typically include mortgages, loans, and credit card debts. Independent valuations for major assets ensure accuracy.

Step 2: Assess Contributions

The court currently considers both direct and indirect contributions (although keep in mind this is changing on 10 June 2025 with amendments to the Family Law Act and stay tuned to our website for more on this):

  • Financial contributions, including earnings, savings, and property brought into the relationship.
  • Non-financial contributions like home improvements, managing investments, or running a business.
  • Homemaking and parenting responsibilities.

Step 3: Consider Future Needs

The court evaluates each person’s future needs, considering:

  • Age and health
  • Income potential and employment prospects
  • Childcare and dependent responsibilities
  • Length of the relationship
  • Other relevant factors

Step 4: Justice and equity

The court decides if the proposed settlement is just and equitable. Adjustments can be made on this step. An example may be in circumstances where one party is retaining a high portion of the combined superannuation of the parties, and the other party may for example be retaining the former matrimonial home and the mortgage. In that case, the court could make an order for the first party to split some super to the other party, and the other party to make a payment to the first party.

Formalising Your Property Settlement

Formalising your property settlement legally protects both parties. Two common ways to record a settlement in a binding and enforceable way is to enter into Consent Orders or a Binding Financial Agreement (BFA).

Consent Orders

  • Approved/made by the Federal Circuit and Family Court of Australia when filing an Application for Consent Orders and Minutes of Consent.
  • Legally binding and enforceable.
  • Clearly outlines agreed terms.

Binding Financial Agreement

  • Created without court “approval” but requires independent legal advice for both parties.
  • Can address property division, superannuation splitting, and spousal maintenance.
  • Legally binding and enforceable.

Important Time Limits

There are specific time limits for property settlements:

  • Married Couples: You have 12 months from the date that a divorce order takes effect to file in court for property settlement and/or spousal maintenance orders.
  • De Facto Couples: You have 2 years from the date of separation to file in court for property settlement and/or maintenance orders

Missing these deadlines requires special court permission (known as leave of the court), which may not always be granted and can be an expensive process.

Benefits of Early Property Settlement

Initiating your property settlement early has many advantages:

Provides Financial Clarity and Certainty

Settling your property matters early gives you clear knowledge of your financial situation. You know exactly what you own and owe, enabling better planning and decision-making about your future finances.

Minimises Conflict and Expensive Legal Disputes

The earlier you settle property matters, the less likely disputes may escalate. Addressing financial issues early reduces misunderstandings, disagreements, and costly court battles, saving both parties time and money.

Prevents Complications from New Assets or Debts

Finalising your settlement quickly prevents additional assets or debts from complicating your case. If either party accumulates new property or liabilities after separation, these can complicate negotiations and increase tensions.

Facilitates Emotional and Financial Recovery

Early settlement allows you to move on emotionally and financially. By promptly resolving financial ties, you can focus your energy on rebuilding your life and planning your future, leading to quicker emotional recovery.

Contact Daykin Law for Help With Your Property Settlement

Property settlements can be complex and emotionally charged. Getting expert legal guidance early is essential. Daykin Family Law specialises in managing property settlements effectively and ensuring outcomes tailored to your unique circumstances.

If you’re considering a property settlement before divorce, contact Daykin Family Law today for clear, practical, and supportive legal advice.

FAQs

The duration of a property settlement varies significantly based on the complexity of your property settlement and the level of agreement between parties. Settlements can take anywhere from a few weeks to more than a year, particularly if court involvement is necessary.

Typically, each party covers their own legal fees and court costs. However, in some cases, the court might order one party to contribute to the other’s legal expenses, especially if one party has acted unreasonably during proceedings as an example.

While it’s possible to handle property settlements without legal representation, having a lawyer is highly recommended. Property settlements involve complex legal processes, and professional advice ensures your interests are protected and agreements are legally enforceable. If you’re in Brisbane and need help with property settlement, contact us today.